Income Alerts Newsletter for 03/25/2016

Safety First

With capital preservation as our most important priority, we begin as always with a focus on index covered calls, which mitigate company specific risk.

Writing covered calls on ETFs, such as QQQs, is attractive to conservative investors who may not have the time to monitor a selection of companies on a watchlist and wish to avoid risks associated with trading specific companies, such as earnings surprises.

The QQQ options at strike $107.50 for April 16 2016 are offering a 1.34% return, which annualizes at a rate of 21.29%.

Chart for QQQ

The DIA options at strike $175.00 for April 16 2016 are offering a 1.14% return, which annualizes at a rate of 18.17%.

Chart for DIA

The SPY options at strike $203.50 for April 16 2016 are offering a 1.21% return, which annualizes at a rate of 19.14%.

Chart for SPY

Technology Focus: Income Opportunities

An April covered call on QCOM at strike $51.00 using 300 shares is offering an income potential of $300. In May, a strike 52.50 covered call offers $459 and in June, a strike 52.50 covered call offers $519 in premium.

The annualized return by writing covered calls in April is 31.83%, in May is 19.52% and in June is 14.94%.

Chart for QCOM

An April covered call on BABA at strike $76.00 using 300 shares is offering an income potential of $636. In May, a strike 77.50 covered call offers $1,020 and in July, a strike 77.50 covered call offers $1,380 in premium.

The annualized return by writing covered calls in April is 45.62%, in May is 29.53% and in July is 20.67%.

Chart for BABA

Energy Focus: Income Opportunities

An April covered call on HES at strike $52.50 using 300 shares is offering an income potential of $573. In May, a strike 52.50 covered call offers $1,020 and in June, a strike 52.50 covered call offers $1,200 in premium.

The annualized return by writing covered calls in April is 60.39%, in May is 43.94% and in June is 35.29%.

Chart for HES

An April covered call on SLB at strike $73.00 using 300 shares is offering an income potential of $426. In May, a strike 75.00 covered call offers $579 and in August, a strike 75.00 covered call offers $990 in premium.

The annualized return by writing covered calls in April is 31.67%, in May is 17.19% and in August is 11.67%.

Chart for SLB

Healthcare Focus: Income Opportunities

An April covered call on PFE at strike $30.50 using 300 shares is offering an income potential of $78. In May, a strike 31.00 covered call offers $126 and in June, a strike 31.00 covered call offers $174 in premium.

The annualized return by writing covered calls in April is 13.84%, in May is 8.91% and in June is 8.34%.

Chart for PFE

An April covered call on GILD at strike $91.50 using 300 shares is offering an income potential of $615. In May, a strike 92.50 covered call offers $1,005 and in June, a strike 92.50 covered call offers $1,185 in premium.

The annualized return by writing covered calls in April is 36.44%, in May is 23.96% and in June is 19.19%.

Chart for GILD

Consumer Staples Focus: Income Opportunities

An April covered call on ADM at strike $37.00 using 300 shares is offering an income potential of $195. In May, a strike 38.00 covered call offers $261 and in June, a strike 37.00 covered call offers $462 in premium.

The annualized return by writing covered calls in April is 28.80%, in May is 15.38% and in June is 18.71%.

Chart for ADM

An April covered call on CVS at strike $102.00 using 300 shares is offering an income potential of $321. In May, a strike 105.00 covered call offers $336 and in August, a strike 105.00 covered call offers $780 in premium.

The annualized return by writing covered calls in April is 16.92%, in May is 7.03% and in August is 6.44%.

Chart for CVS

Consumer Discretionary Focus: Income Opportunities

An April covered call on AMZN at strike $585.00 using 300 shares is offering an income potential of $4,110. In May, a strike 585.00 covered call offers $9,645 and in June, a strike 585.00 covered call offers $11,070 in premium.

The annualized return by writing covered calls in April is 38.19%, in May is 36.73% and in June is 28.68%.

Chart for AMZN

An April covered call on FOXA at strike $28.00 using 300 shares is offering an income potential of $135. In May, a strike 29.00 covered call offers $195 and in July, a strike 28.00 covered call offers $420 in premium.

The annualized return by writing covered calls in April is 26.16%, in May is 15.09% and in July is 17.01%.

Chart for FOXA

Financials Focus: Income Opportunities

A May covered call on BAC at strike $14.00 using 300 shares is offering an income potential of $141. In June, a strike 14.00 covered call offers $180 in premium.

The annualized return by writing covered calls in May is 22.39% and in June is 19.47%.

Chart for BAC

An April covered call on AXP at strike $61.00 using 300 shares is offering an income potential of $231. In May, a strike 62.50 covered call offers $372 and in July, a strike 62.50 covered call offers $555 in premium.

The annualized return by writing covered calls in April is 20.47%, in May is 13.17% and in July is 10.10%.

Chart for AXP

Industrials Focus: Income Opportunities

An April covered call on UNP at strike $82.50 using 300 shares is offering an income potential of $312. In May, a strike 82.50 covered call offers $765 and in August, a strike 82.50 covered call offers $1,275 in premium.

The annualized return by writing covered calls in April is 20.66%, in May is 20.48% and in August is 13.58%.

Chart for UNP

An April covered call on HTZ at strike $11.00 using 300 shares is offering an income potential of $120. In May, a strike 11.00 covered call offers $225 and in June, a strike 11.00 covered call offers $285 in premium.

The annualized return by writing covered calls in April is 62.79%, in May is 48.36% and in June is 42.18%.

Chart for HTZ

Materials Focus: Income Opportunities

An April covered call on FCX at strike $10.50 using 300 shares is offering an income potential of $180. In May, a strike 11.00 covered call offers $282 and in August, a strike 11.00 covered call offers $453 in premium.

The annualized return by writing covered calls in April is 100.12%, in May is 64.51% and in August is 43.01%.

Chart for FCX

An April covered call on HUN at strike $13.00 using 300 shares is offering an income potential of $120. In May, a strike 13.00 covered call offers $285 and in August, a strike 13.00 covered call offers $510 in premium.

The annualized return by writing covered calls in April is 50.58%, in May is 49.82% and in August is 37.02%.

Chart for HUN

Utilities Focus: Income Opportunities

An April covered call on ED at strike $77.50 using 300 shares is offering an income potential of $135. In May, a strike 77.50 covered call offers $315 and in August, a strike 77.50 covered call offers $420 in premium.

The annualized return by writing covered calls in April is 9.51%, in May is 8.87% and in August is 4.62%.

Chart for ED

An April covered call on NEE at strike $120.00 using 300 shares is offering an income potential of $330. In May, a strike 120.00 covered call offers $705 and in June, a strike 120.00 covered call offers $810 in premium.

The annualized return by writing covered calls in April is 14.87%, in May is 12.73% and in June is 9.90%.

Chart for NEE

Telecommunications Focus: Income Opportunities

An April covered call on CTL at strike $32.00 using 300 shares is offering an income potential of $75. In May, a strike 32.00 covered call offers $285 and in July, a strike 32.00 covered call offers $405 in premium.

The annualized return by writing covered calls in April is 12.84%, in May is 19.79% and in July is 14.50%.

Chart for CTL

An April covered call on VZ at strike $54.00 using 300 shares is offering an income potential of $90. In May, a strike 55.00 covered call offers $120 and in June, a strike 55.00 covered call offers $183 in premium.

The annualized return by writing covered calls in April is 8.94%, in May is 4.74% and in June is 4.89%.

Chart for VZ

* Prices quoted were as of time of writing and may not be current.

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